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Retirement Checklist

Have You Started Your Retirement Checklist Yet? (Time’s Running Out)

Don’t forget to include a retirement checklist to all of your other important to-do lists.

What’s on your retirement checklist?

Santa shouldn’t be the only one who makes a list and checks it twice.

Retirement experts say now is the time to make plans for how you’re going to transition into your new life after finishing your working career.

It starts with a retirement checklist. It doesn’t matter whether you’ve been naughty or nice, but experts say you’ll regret it if you don’t start one well in advance of retirement.

“Ideally, you create that retirement list when you’re within that five-year mark of retirement,” says Eric Brotman, the owner of Brotman Financial Group in Baltimore and author of Retire Wealthy. “It doesn’t have to be in December but a lot of people do retire at the tail end of the year and take whatever unpaid vacation they might have.

Brotman says at the latest people should be starting their list this month if they plan to retire 12 months from now at the end of 2015. He suggests, however, starting it two years out a minimum as the best strategy.

“Now is the right time if not a year ago,” Brotman says. “Figure out what decisions need to be made financially and from a tax perspective and from an estate perspective. Certainly, you want to start positioning assets to generate income instead of being built for appreciation. The reality checklist has to include how much money I am going to need and where my income is going to come from.”

Brotman says people should position assets with five-years-worth of cash and cash equivalents in their portfolio. That’s a lot but you need to do that prior to retirement for enough of a stretch that if the market moves against you in your last six months of work, it doesn’t mean you can’t leave, he says.

“The last thing you want to do is be like those poor souls who planned to retire in 2008 who in 2007 thought everything was rosy. They were ready to do this and in 2008 their portfolio took a big hit because it was positioned for appreciation, and it devalued,” Brotman says. “A lot of them couldn’t retire.”

Brotman says that while that quantitative planning is necessary a year or two out from retirement, that qualitative list is just as important. That’s a factor many people don’t consider, he says.

“It’s about what am I going to do every day and what are my hobbies going to be. Am I going to travel and am I going to spend time with grandkids? Am I going to work part-time some place? I think the psychological piece of retirement in some cases is much bigger than financial.”

The reason it is because as big as the financial piece is – all of a sudden you’re living without a paycheck and asking where is the money coming from — you also have to deal with what you are going to do all day, Brotman says. A lot of people who retire don’t live very long in retirement because they no longer have their sense of identity and purpose, says Brotman, who adds it’s really important that you have something to do that “you’re excited about.”

Make sure if you’re married that you discuss it at length with your wife and don’t come up with a decision that you keep to yourself, Brotman says. The couple not only needs to discuss the financial issues but the social and psychological issues as well, he says

“You need to work on this as a couple to understand what it means,” Brotman says. “That’s especially true if one of you is working and the other one is done. That’s a radical life shift. My wife is a stay at home mom, and I am glad she is able to do that but if I were to retire tomorrow and be puttering around the house, she would be yelling at me to get out and have something to do.”

Andy Landis, a Seattle-based author of When I Retire, agrees that financial planning is only part of the next phase of your life, and people need to plan for having a life. If you don’t, that can lead to a crisis rather than a more of a rebirthing experience it should be, he says.

“Everything you see about retirement planning is money, money, money and that’s important, but maybe even more important is what the heck are you going to do with yourself,” Landis says. “Your spouse is really wondering that. I like to say it would be a shame to outlive our money, but it would also be a shame to outlive our meaning.”

Landis says he urges people to use a checklist with dozens of choices to see if it attracts people’s interest. It could be staffing a lighthouse or fire lookout tower for a summer. Some may be interested in going to school or visiting national parks.

It’s about developing a plan of what to do in the first six months to a year and then a plan for the next two to five years and then a long-term plan, Landis says.

“I think what this can do is ease that transition into retirement,” Landis says. “Instead of a difficult transition, it can be a time of eagerness if you know what you want to be doing.”


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